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M. McArdle: Venezuela and Argentina running out of other peoples money

For about a decade, Venezuela under Hugo Chavez and, to a lesser extent, Argentina under the Kirchners were popular models for leftists seeking an alternative to the neoliberal consensus. The Chavez program of dramatically expanding social spending and the Kirchner refusal to kowtow to foreign investors finally offered alternatives you could point to when the neoliberals started chattering about market confidence and budget balances.
Those neoliberals frequently pointed out the problems with those policies. Chavez and his successor, Nicolas Maduro, diverted oil-investment funds into social spending, causing Venezuela’s oil production to fall; the only thing propping up the economy was the rapidly rising price of oil. Argentina cut itself off from world capital markets, and over the years it had to resort to increasingly desperate fiscal strategies; the only thing propping up its economy was a big commodities boom, driven by the same Chinese demand that was causing oil prices to soar. But these arguments failed to convince those who were gaga for Chavismo; all that free-market cant was just theory, and the Chavez acolytes could point to real, tangible advances in reducing poverty and boosting economic growth.